AT&T Uses Long Weekend To Bury $10B Q4 Charge
AT&T, the largest telephone company in the U.S., gave a heads up that it's planning to record a $10 billion charge in its fourth quarter financial results, including a $7.9 billion write-off related to changes in its pension and retiree benefit plans, and a $2.1 billion non-cash charge based on the determination that copper assets are no longer necessary as customers move away from older voice and data products.
As an increasing number of customers shift their calling habits over to mobile phones and Internet-based calling services like Skype, the need for more copper landlines is quickly disappearing.
According to Bloomberg, AT&T has been fairly consistent with making pension adjustments in January just prior to announcing fourth quarter results. In this instance, by leaving out one-time write-offs like its pension loss and asset charge, analysts on average expect profits to be $0.56 per share, up from $0.53 per share a year prior, on revenue of $34.2 billion.
Investors are still figuring out how to react to the news. Early on, AT&T's stock price fell by as much as 1.3 percent to $33.37 per share, but is now up to $33.80. They'll have an extra day to figure things out, as the stock market will not open for trading on Monday, January 19, 2015, a national holiday (Martin Luther King Jr. Day).
